Banco Comercial Português (BCP) has set aside €36.2 million in provisions to cover litigation risks associated with Swiss franc-denominated mortgage loans held by its subsidiary, Bank Millennium.
The provision reflects the ongoing legal challenges surrounding foreign-currency loans in Poland, where borrowers have faced significant debt burdens due to exchange rate fluctuations.
BCP's decision underscores the persistent financial and legal exposure that banks in the region continue to manage years after the initial issuance of these products.
This development aligns with a broader trend of European lenders addressing legacy risks from foreign-currency lending.
Recently, Addiko Bank announced similar provisions to cover legal risks linked to foreign-currency loans in Croatia and Slovenia, indicating that the issue remains a material concern for banks with exposure to Central and Eastern European markets.
For investors, the provision represents a direct hit to BCP's earnings but also serves as a risk-mitigation measure, potentially reducing future uncertainty.